IHCL wants to become 'superstar' of India's hospitality sector, eyes growth

The Tata group's hospitality arm recorded its 13th consecutive quarter of record performance in June this year, with a 19% increase in consolidated net profit (to ₹296 crore) and a 32%ump in revenue

India needs an all-inclusive hospitality brand, says Puneet Chhatwal, managing director and chief executive officer of In­dian Hotels Company (IHCL), the cou­n­try’s largest hospitality chain.

 

He is de­t­ermined to turn IHCL into that brand.

 

The company is growing like never before, and is also on an acquisition spree. Its portfolio spans upscale, midscale, and budget hotels, and, of course, there is the crown jewel — Taj Hotels.

 

The growth strategy, however, goes beyond Taj, and builds on a landscape that has changed since the Covid-19 pandemic. What began with revenge travel (a near-forgotten term now) as the world opened up after the pandemic has matu­red into a consistent desire to travel both within and outside of India. The robust growth in domestic travel and a booming economy have now created a situation where demand outpaces supply.

 

According to Hotelivate, a hospitality consultancy, India has about 200,000 branded hotel rooms. This number is expected to grow to 300,000 by 2030 as hotel chains — both domestic and international — expand their presence in the subcontinent.

 

Little wonder then that Taj Hotels’ parent company is stepping on the gas and expanding its bouquet of brands.

 

Branching out with boutique

 

At IHCL’s 124th annual general meeting in July, Tata Group Chairman N Chandrasekaran said acquisitions would be key to driving growth, especially in locations where large properties are not viable and where supply is limited.

 

“Expansion is possible only if we have the right property,” he said. “India is a major opportunity for tourism and there is a dire need for good quality hot­els in the country — not just palace and business hotels, but also those required in hill stations and religious areas.”

 

He added that as the company expa­n­ds, it is conscious of the size of the hotel and the price segment. He spoke of the op­portunity that lies in boutique hotels, such as Tree of Life. “We are looking at acquiring such boutique chains,” he said.

 

In November 2024, IHCL had acquired a majority stake in Tree of Life Resorts & Hotels, building upon its partnership with the Ambuja Neotia Group, then Tree of Life’s parent company. The brand currently has over 20 hotels and 330 keys under it. IHCL intends to expand it to 100 properties by 2030.

 

Earlier this year, IHCL also unveiled “Claridges Collection” after taking over the management of the iconic Claridges in Lutyens’ Delhi. A curated ensemble of boutique luxury hotels, the Claridges Collection, which currently comprises three hotels, is positioned at par with the Taj brand and will be expanded to over 20 hotels by 2030.

 

More followed. Last month, the company acquired a 51 per cent equity stake in ANK Hotels and Pride Hospitality, which operate 135 midscale hotels under the Clarks Hotels and Resorts brand, for about ₹204 crore.

 

In a note dated August 13, analysts at JP Morgan observed that the Clarks hotels acquisition deal was in line with the company’s asset-light strategy. “This will offer IHCL deeper geographical penetration in the midscale segment,” the analysts noted. “The inclusion of these 135 hotels comprises 90 per cent existing assets, which operate via management contract model.”

 

At the time of announcing the deal, Chhatwal told Business Standard that “India’s hospitality and aviation moment is happening now,” with the hospitality sector “witnessing sustained demand momentum amid rising discretionary spending and India’s growing economic prominence”. The partnership, he added, addressed the growing needs of the aspirational traveller.

 

While the acquisition strategy is not new for IHCL, the company intends to stay with it, said Chhatwal, adding that a robust balance sheet and strong free cash flow would allow them to actively pursue opportunities.

 

“We are currently net debt zero, we have cash, and we have the Tata Group behind us. As and when opportunities arise, we will go for acquisitions,” he said.

 

IHCL has also signed a marketing and distribution agreement with Brij Hospitality, which has a portfolio of 19 hotels, of which nine are in the pipeline. 

                       

 

Expanding brandscape

 

A branding and rebranding exercise is also underway.

 

The hospitality major has started work on rebranding the 135 Clark branded hotels across 110 locations to Ginger, strengthening its presence in the midscale category. With 106 hotels currently, the Ginger brand clocked a revenue of ₹675 crore in the financial year 2025 (FY25). The move will take the count to 241, and the brand is expected to touch ₹800 crore in revenue in FY26.

 

In the pole position, Ginger is set to reach 500 hotels in the next 5-7 years, and “in a decade’s time, we might reach 1,000 Ginger-branded hotels,” Chhatwal said.

 

IHCL had earlier identified Ginger as the second most important brand in its portfolio — after Taj — and now has a total of 17,537 keys in the midscale segment. This is significant, given that the midscale-economy segment will account for 27 per cent of the Indian hospitality sector by 2030, according to hospitality consultancy Horwath HTL.

 

In August last year, IHCL had further expanded its brand offerings with the launch of Gateway, a full-service upscale hotel. Gateway is a portfolio of 40 hotels with 29 in the pipeline.

 

The idea is to tap into growth opportunities in micro markets in the metros, besides Tier-II and III cities.

 

“Each hotel is designed to reflect the spirit of its destination through intuitive service, regional design, and immersive experiences,” said Leah Tata, vice president and brand leader, Gateway Hotels & Resorts. “With its recent openings in Bekal, Coorg, Diu, and Goa, and upcom­ing openings in Ahmedabad, Manipal, Jaipur, and Thane, the brand has built its presence in high-potential leisure and urban centres of India,” she said.

 

Gateway, she added, will scale to a 100-hotel portfolio by 2030, contributing to IHCL’s guidance of 700 hotels.

 

Under its ‘Accelerate 2030 strategy’, which was unveiled last year, IHCL had announced plans to have a portfolio of over 700 hotels, besides doubling its revenue to ₹15,000 crore.

 

“While unveiling its vision for 2030, the company had highlighted that the new-age brands (Ginger, Tree of Life, and ama Stays) will expand at a faster pace,” analysts at JM Financial noted after the Clarks deal was announced. “The transaction will take IHCL’s portfolio to over 550 hotels while significantly expanding the reach of ‘Ginger’, given that 70 per cent of the incoming assets are at locations where Ginger doesn’t have a meaningful presence.” 

 

 

Asset-light strategy

 

The Tata group’s hospitality arm recorded its 13th consecutive quarter of record performance in June this year, with a 19 per cent increase in consolidated net profit (to ₹296 crore) and a 32 per cent jump in revenue from operations (to ₹2,041.8 crore) in a quarter marked by geopolitical tensions.

 

“We would like to see such record growth in at least the coming five-six quarters, provided our base is also growing,” Chhatwal had told Business Standard. “Years ago, a Bollywood actor became the country’s first superstar after giving consecutive hits. We want to be superstars, too.”

 

IHCL has identified an asset-light strategy to achieve its 2030 goals. Until about a decade ago, only 5 per cent of the company’s hotels were under management contracts. This made expansion difficult.

 

While speaking to Business Standard earlier this year, Chhatwal noted that while the aspiration was to have a 50-50 mix of capital-heavy and capital-light portfolio, “it is already tilted in favour of asset light”.

 

“We feel that as our portfolio has grown, our guidance of 50-50 is already corrected to 35-40 being heavy and the rest being light,” he said.

 

With this 360-degree approach, IHCL is decisively checking-in to growth.  Room for growth IHCL’s acquisition playbook  November 2024:

• Acquired a majority stake in Tree of Life Resorts & Hotels; plans to expand it to 100 properties from 22 currently by 2030
• Started managing New Delhi’s iconic Claridges hotel from April, 2025.
• Unveiled boutique hotel ensemble Claridges Collection.
• From three hotels, it plans to expand to 20-plus by 2030
• Acquired 51% stake in Clarks Hotels & Resorts for ₹204 crore in August 2025
• Is rebranding 135 Clarks hotels to Ginger.
• Intends to expand to 500 Ginger hotels in the next 5-7 years